Why You Need a Holiday Gifting Budget — And How to Talk About It

Zina Kumok

November 22, 2017

We all want to give our friends and family the world. But attempting to do so could leave you in less-than-stellar financial shape. That’s why your holiday gifting budget should be a conversation you have with your loved ones. Here’s why spending limits will make your holidays more cheerful for all — and how to bring them up.

Why You Should Talk About It

Discuss budgets before the shopping frenzy begins, or you risk erring on the side of extravagance, says financial therapist Amanda Clayman. This attitude, she explains, “gets us into a war of escalating giving, creates lots of anxiety, busts boundaries, breeds resentment and gets us even further away from what this practice should be about.”

If you’re nervous about broaching the subject, consider that the other party might be feeling the same way. Even family members who can afford to spend hundreds on presents might appreciate your offer to cut back. Who knows what unspoken medical bills or home renovations they have on their plates.

How to Bring It Up

Here’s the thing: Telling someone you want to spend less on them during the season of giving is awkward. What makes it worse is beating around the bush — so don’t, Clayman suggests.

Instead, try something like this: “I've set a budget for holiday spending, and I'm keeping friend gifts around $30 per person. I know it's awkward to talk about this, but I'm also trying to be better with communicating about money. Are you cool with setting that as our range?"

When I was making only $28,000 a year and dealing with thousands in student loans, Christmas shopping for my family was stressful. I knew that most of the people around me had bigger budgets, and I hated feeling like I couldn’t be as generous.

My solution was to purchase the most thoughtful gifts I could, even on a small budget. I bought my Japanophile brother-in-law a Katsushika Hokusai wall calendar, and my laidback father-in-law a T-shirt from one of his favorite companies. Each gift cost $30 or less. I felt genuinely proud watching them open their presents knowing it was something that played into their interests and personality — not just because it was the must-have gadget of the season.

How to Deal With Group Gifts

Have you ever had a sibling humblebrag that they bought Mom and Dad a Caribbean cruise for Christmas? Suddenly, your “Coffee of the Month Club” gift starts to pale in comparison.

If someone else’s giving habits make you feel inadequate, talk it out to better understand their motivations. Many people give more because it gives power in their social sphere, or to compensate for something else, Clayman says. For example, your brother might not live as close to your parents as you do, so he eases his guilt by buying a larger gift.

You can even offer to pay for half of the big ticket item, saving your friend or family member money and squashing any reason for jealousy.

How to Deal With All Your Friends’ Kids

While the adults in your life might be fine with small gifts or none at all, the kids you know might still expect a present. Talk to the parents and find out what their expectations are for their kids. You might be surprised to find that some parents are OK with their children receiving fewer gifts.

“I know several people who have expressly asked that friends do not give gifts to their children — both to reduce materialism and to cut down on clutter — and who will ask that friends take their child to a movie or have some other experience instead,” Clayman says.

Security

Follow Us

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment advice. Please consult a financial adviser for advice specific to your financial situation. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc. is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.